Elon Musk once scoffed at the notion that BYD could compete with his company. Now, the automaker run by billionaire Wang Chuanfu is poised to be the new No. 1 in electric vehicles.
Amidst the swirling chaos of the EV landscape, Tesla finds itself at a crossroads, its once-bright promises of an affordable electric vehicle dimming against a backdrop of canceled projects and fierce competition.
The saga unfolds with the abrupt cancellation of Tesla’s long-anticipated entry-level car, a move that has left investors reeling and consumers wondering what lies ahead. For years, Elon Musk has championed the vision of affordable electric cars for the masses, but now, those dreams seem dashed as Tesla pivots towards self-driving robotaxis on the same platform.
But the fallout doesn’t stop there. As news of the scrapped Model 2 spreads, so too does the tumult surrounding Tesla’s acquisition of Twitter, now rebranded as X. Under Musk’s volatile leadership, the social media giant has faltered, shedding value and struggling to retain advertisers.
Yet, amidst the turmoil, Musk remains undeterred, teasing investors with promises of a robotaxi unveil while Tesla’s shares hang in the balance, rising and falling with each cryptic tweet.
Meanwhile, in the shadow of Tesla’s missteps, Chinese electric vehicle makers surge ahead, flooding the market with affordable options that threaten to overshadow Musk’s grand ambitions. As BYD reports soaring sales and plans for exports, Tesla grapples with the consequences of its delayed entry into the low-cost segment.
But the road ahead remains uncertain. With Musk’s attention divided among his sprawling empire and Tesla’s image tarnished by controversies, the path to mass-market dominance grows ever more precarious. As competitors race ahead, Tesla finds itself running late to the party, grappling with manufacturing woes and missed opportunities.
In the midst of it all, one thing is clear: the once-promised future of affordable electric vehicles now hangs in the balance, leaving investors and consumers alike questioning what comes next for the pioneering automaker.
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how BYD competes Tesla in this video
It’s a fairytale for the modern age: an orphan from one of China’s poorest regions rose to become the billionaire founder of the world’s leading producer of electric cars.
BYD’s vehicles are now sold in more than 60 countries and the company has just kicked Tesla off the top spot as the world’s biggest EV maker, selling 42,000 more cars than its US rival last year.
But the man at the center of the story, Wang Chuanfu, has often flown under the radar. Instead, the almost 30-year history of BYD gives us glimmers into his strategic thinking, adaptability, and vision.
Origin story
Born in 1966 in east China’s agricultural Anhui province, Chuanfu was raised by his older siblings after his parents, both rice farmers, died.
He got a scholarship to study chemistry at Central South University, known back then as Central South Industrial University, and later received a master’s degree in battery technology from the Beijing Non-Ferrous Metal General Research Institute, now known as the GRINM Group.
After a few years as a government researcher, Chuanfu moved south to Shenzhen, a growing innovation hub thanks to its designation as a Special Economic Zone.
There, 29-year-old Chuanfu and his cousin, Lu Xiangyang, founded a cellphone battery manufacturing company and named it BYD.
Chuanfu has said in interviews that the name didn’t stand for anything at the time. It’s since acquired two apt nicknames: “Build Your Dreams” and “Bring Your Dollars.”
Cellphone battery success
Within four months, they had an office building and a factory thanks to a $300,000 injection from his cousin, The Wall Street Journal reported.
From the start, BYD had a clear-cut strategy: emulate successful products and keep costs as low as possible.
The goal was to replicate products made by the likes of Toyota, Sanyo, and Sony, but make them cheaper than their Japanese suppliers.
Instead of expensive machinery, Chuanfu hired a huge workforce on short-term contracts, enabling him to avoid wage increases, per the Journal.
By 2002, BYD dominated the rechargeable battery market. Its customers included Motorola, Nokia, Sony Ericsson, and Samsung. Chuanfu had also made it onto the Forbes Chinese rich list.
Early disrupter
The following year Chuanfu purchased failing state car manufacturer Tsinchuan Automobile and renamed it BYD Auto.
Together with BYD electronics, which manufactures batteries and handset components, these two subsidiaries comprise the company’s main operations.
In 2005, BYD launched a sedan called the F3. It was far cheaper than the Toyota Corolla it resembled and topped sales charts in China by the end of the decade, the Journal reported.
Warren Buffett’s endorsement
In the late 2000s, Warren Buffett was looking to capitalize on the growing demand for cars in China and, on the recommendation of his partner Charlie Munger, turned his attention to BYD.
Referring to Chuanfu, Munger said he told Buffett: “This guy is a combination of Thomas Edison and Jack Welch — something like Edison in solving technical problems, and something like Welch in getting done what he needs to do. I have never seen anything like it.”
During a tour of their operations, Chuanfu reportedly took a sip of battery fluid to impress investors and prove how clean his batteries were, according to the Journal.
Based on the search results provided, here is a summary of the key points regarding the race between Elon Musk’s Tesla and China’s BYD in the electric vehicle (EV) market:
BYD has surpassed Tesla as the world’s largest manufacturer of electric vehicles. In the fourth quarter of 2023, BYD reported sales of 526,409 EVs, while Tesla delivered 484,507 vehicles – making BYD the new global leader in EV sales[2][3]. This represents a symbolic turning point in the EV market, with China’s BYD overtaking the American Tesla[2].
BYD’s success is attributed to several factors. The company has benefited from strong government support and subsidies in China, which has helped boost domestic demand and strengthen its export capabilities[3]. BYD also has a “structural advantage” in that it controls its entire manufacturing process, allowing it to avoid supply chain issues during the pandemic[1].
In contrast, Tesla has faced challenges, including a slowdown in sales in its key China market and a general deceleration in EV demand[4][5]. However, Tesla remains the top annual EV seller, delivering over 1.8 million vehicles in 2023, compared to BYD’s just under 1.6 million[3].
While BYD has surpassed Tesla in quarterly sales, the American company regained its title as the world’s top EV seller in the first quarter of 2024, selling 386,810 BEVs compared to BYD’s 300,114[5]. This highlights the ongoing competition between the two automakers in the rapidly evolving global EV market.
In summary, China’s BYD has emerged as a formidable competitor to Elon Musk’s Tesla, overtaking the American company as the world’s largest EV manufacturer in the fourth quarter of 2023. However, the race remains close, with Tesla regaining its crown in the first quarter of 2024[1][2][3][4][5].
Citations:
[1] https://www.businessinsider.com/byd-founder-wang-chuanfu-biggest-chinese-global-ev-automaker-2024-1
[2] https://www.bloomberg.com/news/features/2023-12-27/elon-musk-s-tesla-is-losing-ev-race-to-china-s-byd
[3] https://www.trtworld.com/business/musks-tesla-falls-behind-in-ev-race-chinese-byd-claims-the-championship-16510305
[4] https://qz.com/tesla-elon-musk-ford-byd-gm-ev-hybrid-fisker-roundup-1851388760
[5] https://www.cnn.com/2024/04/03/cars/china-tesla-byd-competition-hnk-intl-dg/index.html
